Government has ‘capacity to start impacting on people’s pockets’

Minister for Public Expenditure and Reform Brendan Howlin has said Government has the "capacity to start impacting on people's pockets" when asked about public service pay restoration.

Public service trade union leaders believe that talks with the Government on pay restoration will now begin in early May.

Speaking on his way into Cabinet this morning, Mr Howlin confirmed he would be “setting out the Government’s stall” and inviting trade union representatives to open discussions in the next number of weeks.

“We will be measured in what we do and that will apply not only to expenditure in relation to public sector pay but to all expenditure,” he said.

“We’re going to have a prudent approach to next year’s budget and a prudent approach to the future.”

The public service committee of the Irish Congress of Trade Unions met on Monday to consider the forthcoming discussions.

Informed sources said that while many union leaders were supportive of the concept of seeking a flat-rate rather than a percentage increase, they recognised that this was not a foregone conclusion.

A flat-rate rise is considered to be more beneficial to lower-paid workers than a percentage increase.

It is understood union leaders are anxious that any proposals coming from the talks should be “simple” and not hit or benefit any particular group in the public service disproportionately.

Following talks on a successor deal to the original Croke Park agreement, deep divisions emerged on the measures proposed at the time between unions repres enting different groups in the public service.

The Government is planning to unwind financial emergency legislation which underpinned two, and in some cases three, pay cuts for staff in the public service since 2009.

Minister for Public Expenditure and Reform Brendan Howlin told the Dáil last week that the legislation, known as Fempi, had generated savings of about €2.2 billion on the public service pay and pensions bill and “the economy could not sustain the immediate restoration of all those reductions”.

He added: “I have indicated that, following receipt of the first-quarter exchequer returns and engagement with my colleagues in Government, it is intended that I talk to the public service unions regarding the gradual unwinding of the Fempi Acts.”

Some unions are also seeking a reversal of the longer working week introduced as part of productivity measures.